Utilize the AICPA website to respond, however to respond to this case, please consult not only auditing standards (AU-C), but also the AICPA’s revised Code of Conduct. Facts: Tim Smith is an audit partner in a CPA firm, and Tim recently invested in a diversified mutual fund managed by Fidelity Investments. He owns less than 1% of the total shares outstanding of the mutual fund itself. One of the mutual fund’s holdings is shares of Lava Corp. Lava Corp is one of Tim’s clients and is a nonpublic company.
Required: What guidance tells Tim that he must be independent of Lava Corp, and does his investment impair his firm’s independence on this audit? Respond to these questions in the form of an issues memo. Explain your analysis, citing from the guidance to support your response. If the guidance states that a “covered member” must be independent, you will need to define covered member to fully explain your analysis. Make a clear, reasoned argument, using a logical discussion of relevant guidance. You can use the following headers to begin your response.
Issue 1: What guidance requires Tim to be independent of Lava Corp?
Issue 2: Does this investment impair Tim’s firm’s independence on this audit?

Yowell company granted a sales discount of $360 to a customer when it collected the amount due on account. yowell uses the perpetual inventory system. which of the following answers reflects the effects on the financial statements of only the discount? assets = liab. + equity rev. − exp. = net inc. cash flow a. (360 ) = na + (360 ) (360 ) − na = (360 ) (360 ) oa b. na = (360 ) + 360 360 − na = 360 na c. (360 ) = na + (360 ) (360 ) − na = (360 ) na d. na = (360 ) + 360 360 − na = 360 na

Alpha company uses the periodic inventory system for purchase & sales of merchandise. discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. unless otherwise noted, fob destination will apply to all purchases & sales. the value of inventory is based on periodic system. on january 1, 2016, beginning inventory consisted of 350 units of widgets costing $10 each. alpha prepares monthly income statements. the following events occurred during the month of jan.: dateactivitya.jan. 3purchased on account 350 widgets for $11 each.b.jan. 5sold on account 400 widgets for $30 each. paid freight out with petty cash of $150.c.jan. 10purchased on account 625 widgets for $12 each.d.jan. 11shipping cost for the january 10 purchased merchandise was $400 was paid with a cheque by alpha directly to the freight company.e.jan. 12returned 50 widgets received from jan. 10 purchase as they were not the correct item ordered.f.jan. 13paid for the purchases made on jan. 3.g.jan. 21sold on account 550 widgets for $30 each. paid freight out with petty cash of $250.h.jan. 22authorize credit without return of goods for 50 widgets sold on jan. 21 when customer advised that they were received in defective condition.i.jan. 25received payment for the sale made on jan. 5.j.jan. 26paid for the purchases made on jan. 10.k.jan. 31received payment for the sale made on jan. 21.use this information to prepare the general journal entries (without explanation) for the january events. if no entry is required then enter the date and write "no entry required."

Which of the following is a characteristic that can be used to guide the design of service systems? a. services cannot be inventoried. b. services are all similar. c. quality work means quality service. d. services businesses are inherently entrepreneurial. e. even service businesses have internal services.